MR. McCLELLAN: Good afternoon, everyone. I want to begin with tomorrow's trip to the Gulf Coast. Let me just give you a little bit of a preview of the President's visit.

The President is looking forward to going back to the Gulf Coast region tomorrow. This week is National Volunteer Week, and the President and members of his Cabinet are participating in volunteer service activities across the country, and recognizing volunteers who have answered the President's call to service.

There's no better place to highlight volunteer service than in the Gulf Coast. Since last year's hurricanes, volunteers have brought hope to their neighbors in need and helped bring real progress to the rebuilding effort.

Let me just give you a couple of statistics. More than 21,000 national service members have served nearly 1 million hours and coordinated another 31,000 volunteers in the Gulf Coast rebuilding effort. USA Freedom Corps, an office of the White House, continues to serve as the information clearinghouse for those interested in helping those affected by the hurricanes. The Freedom Corps website, volunteer.gov, lists nearly 500,000 volunteer opportunities in Louisiana, Mississippi and Alabama.

Overall volunteer service in America continues to rise. This past year, more than 65 million Americans volunteered, a 5.6 million increase since the President issued his call to service in January of 2002.

And as you all know, when the President travels across this great nation, he regularly honors outstanding volunteers, including the USA Freedom Corps greeters, by presenting them with the President's Volunteer Service Award. The President will soon be recognizing the 500th USA Freedom Corps greeter.

And with that, I am glad to go to your all's questions today.

Q Scott, Karl Rove is making his fifth appearance in front of the grand jury today. And I'm wondering how you would characterize its effect on the administration? Is it a disruption, a distraction?

MR. McCLELLAN: Jim, I have no new information on that matter, and even if I did have new information, I wouldn't be in position to share it with you, as you know.

Q We have confirmation that he's making his appearance, so I'm just wondering if you can tell me, not in any kind of judicial way, but if you can tell me just in terms of its effect on the business of the administration?

MR. McCLELLAN: No, as you know, there's a policy we have in this administration. That policy hasn't changed. Does anyone else have questions on this topic matter?

Q Yes, Scott, I'll jump in on that one. I think the question is just if you can give us a comment, just the daily workings and whether this --

MR. McCLELLAN: No, my answer is what I just -- my answer is what I just gave you. This administration remains focused on the priorities of the American people.

Go ahead.

Q Rumsfeld is in Iraq. Did the formation of the unity government -- how does that affect the timetable for bringing troops home? Does it bring you a step closer to bringing them home or --

MR. McCLELLAN: Well, as you make progress on the political front, it helps to address the security front. The formation of a national unity government is a real blow to the enemy. It's a real blow to the terrorists. A national unity government that represents all Iraqis is an important milestone for the Iraqi people and for the future of Iraq.

The President has talked about how this is a hopeful moment. Earlier today, he met with a number of bipartisan House leaders. They received a briefing from General Casey and from Ambassador Khalilzad, who were on via video conference from Iraq. Yesterday, we had a briefing with some members of the Senate.

Now there is still going to be violence; the violence is not going to stop overnight. But the formation of the new government was a significant step forward on the political process, and putting in place a government that represents all Iraqis really helps to lay the foundation for further political progress.

On the security front, General Casey provided an update today. There are more than 250,000 Iraqi security forces that are trained and equipped. There are an additional 17,000 that are in the process of being trained. And then there's the police training. The military is really focusing on training the police and addressing some of the problems that have been there and spending more time on that effort, as well, over the course of this year.

And the Iraqi forces are continuing to take more and more of the lead in the fight. General Casey updated some of the numbers there, where we are today, from where we were a year ago. And there is real progress being made, in spite of some of the violence that has taken place. We saw that the last 60 days was a tough period; there were some tough days. But the Iraqi leaders and the Iraqi people showed once again that they reject the terrorists and they reject those who want to turn back to the past. They have continued to defy the terrorists every step of the way.

Q Did General Casey say that the situation was such that you might be able to pull some people out of there?

MR. McCLELLAN: The decisions that the military is going to make is going to be based on conditions and circumstances on the ground. We will look to our military leaders to make those decisions. And I think our military leaders have talked about how we have already been drawing down some troops because there has been significant progress being made and the Iraqi security forces are controlling more territory, they're taking more and more of the lead in the fight.

We're there to continue to support them as they move forward so that they'll be in position to be able to defend the Iraqi people, themselves.

We are on the path to victory. I think that the latest video and statements from Zarqawi is another indication that the terrorists are losing. The formation of a unity government is a real blow to their ambitions to foment sectarian strife or civil war. And one of the Iraqi leaders I saw earlier today talked about how the terrorists, under Zarqawi, fear the new government because it is a government that represents all Iraqis, and it is a blow to their ambitions to spread violence and create chaos.

Q Would you mind my going back to Rove for just one brief moment? Had Mr. Rove alerted Josh Bolten prior to his decision to change Rove's duties here at the White House --

MR. McCLELLAN: He already answered that. I told you I didn't have any new information on it.

Q My question is had he notified him of today's appearance prior to the change in his duties?

MR. McCLELLAN: That decision was made based on what I told you all previously.

Q Scott, two questions. One, as far as this U.S.-India civilian nuclear agreement is concerned, Dr. Malhotra, of the Indian National Congress in the U.S. is leading the Indian American community's effort to reach those lawmakers on the Capitol Hill. And also Ambassador Mulford is here in Washington, U.S. Ambassador to India, and also Minister for Power, in the Indian government, they're also lobbying for this effort. But my question is that, is the President going to meet with lawmakers and senators like he met on immigration?

MR. McCLELLAN: On the nuclear agreement?

Q On the nuclear agreement.

MR. McCLELLAN: He already has. In fact, when he returned from his trip, one of the first things he did was sit down with some of the key leaders on our foreign policy in Congress, a bipartisan group, and talked to them about the importance of this agreement. And I think you've seen there's been very good response from members of Congress and positive feedback about this significant agreement.

This is an agreement that will really help us move forward on the energy front, and help bring India -- at least its civilian nuclear programs -- under the NPT obligations for the first time. And so it's a significant development. And it's based on a practical approach. And it's based on our relationship with India, a country that has not engaged in proliferation.

Go ahead.

Q Second on immigration --

MR. McCLELLAN: Well, let me keep going. I'll try to come back.

Q Nancy Pelosi says that having Tony Snow now behind the podium there is not going to make much difference. What would you say to that?

MR. McCLELLAN: He's someone who brings a good outside perspective. He's got a lot of diverse experience in the media, which will be very helpful. He's spent 25 years in the media, the print side, the radio and TV broadcast side of things, as well. He's also someone that's worked in the government. And he's certainly got some strong views, and I think that's a good thing.

Q But what about specifically that point that Nancy Pelosi is making, she thinks it's not going to be --

MR. McCLELLAN: Well, I think that Tony Snow is going to do an outstanding job for the President. And the President looks forward to him joining the team here shortly, and I look forward to doing all I can to help him.

Q Given the fact that you've been in this job now for almost three years, what advice do you have for him?

MR. McCLELLAN: Well, I had a good conversation with him over the weekend, and we talked about this position. And I provided him some of that advice. And I did so in private. I look forward to continuing to provide him some of my thoughts and insights into this position.

Go ahead.

Q Thank you. Scott, the President's four-point plan to lower the price of gas is being criticized as merely window dressing. And most of what he proposes will take years. Is there really anything he can do to ease the pain now?

We're taking a number of actions on the short run side of things because we can provide some help. But, ultimately, this is a problem that must be solved in a comprehensive way. And that's why the President outlined his advanced energy initiative to really transform the way we power our cars and homes, and lessen our dependence on foreign sources of oil -- by making use of ethanol and hydrogen and pursuing other ways to promote alternative sources of energy. And that's what we have to do in the long run.

In the short run, again, there are steps that we can take to help, but we also have to continue acting on solving the root cause. This is a supply and demand problem. We have tight supplies right now, and that's pushing the price of gas up -- it's pushing the price of oil up, which pushes the price of gas up. So that's why the President announced several steps that we're taking to help address the supply side in the short-run. But this is a problem that we see recur year after year, and it's because of our increasing dependence on oil, particularly foreign sources of oil.

Q Scott, if domestic oil drilling was approved in ANWR, would there be any laws in place that would say you can only sell it to the American public and that the big oil companies could not sell that oil to the highest bidder in China, or India -- because if the free market system worked, it wouldn't relieve the prices at the pumps for Americans.

MR. McCLELLAN: It would be one step that could help. In fact, it passed a decade ago, but the President's predecessor vetoed the ANWR legislation. It would have opened up a small part of ANWR to environmentally-responsible -- or environmentally-sensitive drilling. And we have a lot of new technologies that we can use to minimize any impact. And it would only be on a small portion of that area.

Q No, but the question --

MR. McCLELLAN: And so if you couple that with other steps that you're taking, you would have more supply available, and that would help address high gas prices. Now, many Democrats have opposed those efforts to expand domestic production. The President believes that while we're working to invest in new technologies and promote alternative sources of energy, we also need to be expanding domestic production. And we can do so with respect for our environment, particularly with new technologies that are available to us in this day and age. And there would have been a significant amount of additional oil that would be available today if that had been signed into law.

Q What's to prevent oil companies drilling in ANWR to extract that oil and sell it to China and India, rather than keep it --

MR. McCLELLAN: Well, you bring up a very good point, over the long haul, that -- I mean, there is increasing demand for oil, particularly coming from countries like China and India. That's why we have to address the underlying problem, which is our dependence and our addiction to oil, as the President has talked about. It's not a solution, but it's one of the steps we can take, that it can have a more immediate impact in the short run.

Q Going back to Karl Rove, was the decision made it was potentially too embarrassing to keep him in the position of the policy portfolio, as well as the politics portfolio, and that that was why he was moved out of it -- knowing that these grand jury appearances and what might follow was coming up?

MR. McCLELLAN: Well, first of all, he remains very involved in the policy aspect of things. I have made that very clear. And the reasons why the decision was made, in terms of now having three deputy chiefs of staff, as opposed to previously, when we had two, were for the reasons that I talked to you about on that very day.

Q Coming back to the trip tomorrow, is the President going to talk about the supplemental spending bill, to which other things have become attached, and his objections --

MR. McCLELLAN: Well, I don't think he necessarily has formal remarks. I'm sure you all will hear from him while he's down there participating in volunteer projects, both in Louisiana and in Mississippi. We put out a statement of administration policy. It's something that we worked on with Senate leaders, and that policy says that the cap for the emergency spending legislation ought to be at $92.2 billion, excluding any funding for pandemic influenza. Now, we put, I think, $2.3 billion in our '07 budget for pandemic influenza preparedness, and we would be fine with that being included in the emergency spending.

But it's important that Congress move forward on the emergency spending and get it passed as quickly as possible, because it provides important resources, vital resources, for our troops who are waging the war on terrorism abroad, and important funding for the Gulf Coast recovery and rebuilding efforts.

The President, this afternoon, is going to be participating, or hosting a meeting to talk with his key leaders about where we are on the recovery and rebuilding efforts and the progress that we've made, as well as looking ahead to the additional steps that we're taking.

Q Scott, can I follow? Can you tell us anything about the specific stops tomorrow?

MR. McCLELLAN: These are considered OTR, so we'll keep you posted as we get down there.

Q Just to follow up on the question -- how did the administration plan to combat the perception that it's against spending more to support the troops?

MR. McCLELLAN: This President has made sure that our troops are fully funded. If you look at our defense budgets, they have significantly increased under this administration, because we are trying to accomplish two things. One, we're working to win the war on terrorism, and we are winning. But this is a long struggle that we're engaged in, and we've got to continue to stay on the offensive and take the fight to the enemy, and that's exactly what we are doing.

And, two, we have passed a number of emergency spending bills during this time of war to make sure our troops have everything they need to carry out that war and to protect and defend themselves. So I think all you have to --

Q So the --

MR. McCLELLAN: Wait -- I think all you have to do is look at the record. We also have a defense appropriations that is going before Congress. And we have called for additional increases in the defense spending, while holding the line on spending elsewhere in our budget, because that is a top priority item. The number one priority for this President is the safety and security of the American people, and that means continuing to take the fight to the enemy abroad, to win the war on terrorism.

Q But the advocates of additional spending --

MR. McCLELLAN: Okay, a three-part question. (Laughter.)

Q But the advocates of additional spending say that it's necessary to support the troops in this way. So is the White House's position that, in fact, that spending is either unnecessary or wasteful?

MR. McCLELLAN: Look, I think that we share a goal of making sure our troops have everything they need as they carry out the war on terrorism. And we have met that commitment and we will continue to do so. And that's why they need to move forward and pass this emergency spending legislation, and move forward and meet the President's priorities for the Defense Department that we outlined in our budget.

Go ahead.

Q Scott, a two-part. A citizen project affiliated with the Minutemen Civil Defense Corps has announced that it is planning to build a physical fence along virtually the entire expanse of the U.S.-Mexico border. Since the federal government is reluctant to do the job itself, the group also says the fence, which is modeled after Israel's security fences in the West Bank and Gaza, will cost them about 1/400 of what it would cost the government to put up the same fence.

And my question, would the President support such an effort if it costs the government nothing in labor or material, if it stemmed the massive flow of illegal immigrants daily crossing our southern border?

We've already added a significant number since the President has been in office, to deploy new technology along the border, such as infrared cameras and motion sensors, and unmanned aerial vehicles, and also to work to strengthen the infrastructure along the border, as well, with some state-of-the art fencing in some of the urban areas where we have already put some state of the art fencing in some of those urban areas. And there's some areas where we might need to put some additional fencing. The President has talked about that.

Q The fact that Tony Snow is now, as I understand it, a talk radio host, means that the President --

MR. McCLELLAN: You were not considered, Les. (Laughter.)

Q -- recognizes that talk radio is, along with the Internet, America's new major media thrust, replacing most newspapers and old liberal TV and magazines, doesn't it? (Laughter.)

MR. McCLELLAN: I think it's healthy to have a diversity of viewpoints from within the media.

Q The Washington Post reported on Sunday that according to intelligence officials the White House has recently been asking the CIA questions about the political affiliations of some of its senior intelligence officers. Has the CIA been complying with the White House's requests?

MR. McCLELLAN: I don't know anything about that report. Maybe I missed it when we were in California.

Peter, go ahead.

Q Scott, as the President heads down to the Gulf Coast area tomorrow, what does he think are the biggest challenges still facing the region, and challenges facing the government?

So we've got to continue to support the people along the Gulf Coast. The President is going to be hearing more about where we are in some of these efforts, and I'm sure asking a lot of questions, to make sure that we're doing everything we can from the federal level to work with the states and local communities to help them as they rebuild those communities.

Q Is he frustrated with the pace?

MR. McCLELLAN: Well, this was a hurricane of unprecedented proportions. And it was a catastrophic natural disaster, one like we haven't seen before, that covered a large area of the Gulf Coast, some 90,000 square miles of devastation. And so I think you have to look at in perspective. It's going to take some time to fully rebuild the Gulf Coast region.

But the President has made it very clear that the federal government is going to do its part to help. We have a responsibility to do so, and we are going to meet that responsibility. And that's why the President has provided well over $80 billion already allocated in funding to help with those rebuilding efforts. We've asked for an additional, I believe it's more than $19 billion in the emergency spending legislation.

So we're talking about providing already over more than $100 billion in funding from the federal level to help with those efforts. And we've worked to expedite the process in terms of loans from the small business administration. We immediately worked to get assistance to people in the region, cash assistance because of the unprecedented nature of this hurricane. And there's much more work to do.

But it is something we have remained focused on, on a daily basis. And that's why the President tapped Don Powell, the chairman of the FDIC, to coordinate our recovery efforts under the direction of Secretary Chertoff.

Q One more related question. As you may know, House Republicans are debating whether to keep FEMA under Homeland Security or to return it to an independent status. What's the administration's current thinking?

Q Scott, many of the North Korean defectors at the U.S. Embassy in China, they want to come to United States. Do you have anything on that, that what kind of legal process going on --

MR. McCLELLAN: I'm sorry? What kind of legal process is going on?

Q Yes.

MR. McCLELLAN: Well, there are legal processes in place for addressing those issues. Certainly, when it comes to the humanitarian situation in North Korea, we are very concerned about the plight of the North Korean people and the suffering that they face under this regime that is in power. We've spoken out about that many times.

It is a very high priority for the President, something he brings attention to. Every time he sits down and meets with a world leader, he brings this subject up, because this is a repressive regime that is violating people's human rights, and it's a situation that the President believes the world should not tolerate. And we will continue calling attention to it. And we will continue to do what we can to help those people.

Go ahead, Rick.

Q Scott, two questions. First, Iran is threatening -- or is saying it intends to share its nuclear knowledge with other countries, which I guess could be in violation of the NPT. How can we view that particular threat?

MR. McCLELLAN: Well, I think Secretary Rice spoke about it yesterday. She talked about such comments and threats only further isolate the regime and the people of Iran from the rest of the world. We are pursuing a diplomatic solution to prevent the regime from having a nuclear weapon know-how, capability, or weapon.

This is a regime that continues to defy the international community. It continues to ignore and refuses to abide by its obligations. The Security Council, the United Nations, and the Board of the International Atomic Energy Agency has called on Iran to take specific steps, to come clean and to comply with its obligations. This is a regime that continues to further isolate itself from the rest of the world, by its statements, by its threats, and by its actions.

And that is why we are working with other members of the Security Council, it's why we are working with friends and allies, to make sure that action is taken on the diplomatic front to prevent this regime from obtaining nuclear weapons or nuclear weapon know-how.

And the proliferation issue that you bring up, or concern that you bring up only further increases the concern of the international community about this regime's intentions.

Q Well, so far there's all this great concern everywhere. Every week, people are wringing their hands in concern over Iran. And there's always the diplomatic methods being pursued, but they don't seem to be getting anywhere. And if anything, Iran --

MR. McCLELLAN: Well, Secretary Rice has talked about looking at a chapter seven resolution under the Security Council so that we will have more diplomatic tools available to us to pressure the regime to change its behavior. And we remain engaged in discussions. The Security Council -- remember, this matter moved from the Board of the International Atomic Energy Agency to the United Nations Security Council.

The Security Council put out a very strong presidential statement, asked for a report back from the Secretary General of the International Atomic Energy Agency. That is coming later this week. I think it's pretty clear what that report is going to say, which is that this is a regime that is in noncompliance with its obligations, this is a regime that is not abiding by the agreement it made with the Europeans to suspend all its enrichment and enrichment-related activities.

And that's why we have said it is time to act and look at what other tools are at our disposal to force this regime to change its behavior.

Q One last question. Given its threat or hinting that it may use oil as a weapon if sanctions are imposed and so forth, what extra steps has the United States taken on its own or with its allies in the Gulf to protect the Straits of --

MR. McCLELLAN: Well, this is a problem that the regime has with the international community, with the world. So we are working with all our partners in the international community to address the threat posed by this regime and address this regime's pursuit of nuclear weapons under the cover of a civilian program. And those are discussions we continue to have with our friends and allies and with members of the Security Council.

Q Scott, a question about the polls. On many occasions you've told us that the President does not lean on or base his decision-making --

MR. McCLELLAN: Doesn't make decision based on polls.

Q On polls, right. But I'm wondering, with many poll and approval numbers stuck in the 30s for the President, I'm just wondering, do these issues come up at the senior staff meeting? What does it do for morale for the advisors working with the President?

MR. McCLELLAN: Well, I think there are a number of important priorities that the American people are concerned about, and they are priorities that we are acting on. I think the American people are looking at what is taking place in Iraq, and they see the violence that has taken place. But now they also see that the Iraqi leaders and the Iraqi people have come together and formed a government of national unity that is representative of all Iraqis, so this really puts forward a hopeful moment for us to move forward in Iraq, and continue to support the Iraqi leaders and the Iraqi people.

The Iraqi people have shown at the polls time and time again that they are determined to chart their own future, that they want to live in freedom.

Other issues that I think the American people are concerned about are high gas prices, are rising health care cost. That's why we're acting to address those issues, as well. We've taken steps on both those fronts, but there's more that we need to do.

Now, we have a very strong economy. One thing you didn't point out is that consumer confidence is at a four-year high. The numbers came out just yesterday. We've seen more than 5.1 million jobs created since August of 2003; the unemployment rate down to 4.7 percent. So there is a lot of good economic news out there. But high energy prices and rising health care costs do put a strain on family budgets. And that's why we need to continue to address those issues.

Q So are you saying the poll numbers -- whether positive or negative -- don't have any impact?

MR. McCLELLAN: I'm saying we'll leave the political analysis to everybody else. What we're going to keep doing is focusing on the priorities the American people care most about. They're priorities that they share with the President of the United States. And we are acting, and we are getting things done. We have a record of accomplishment. And this President is determined in the remaining thousand days of this presidency to continue to get things done for the American people, and continue to build a more prosperous America, and make the world a safer place.

Q The President is going down to the Gulf area, and there has been some discussion that people who are now back in Ward 9, trying to rebuild their homes, and that they have not gotten access to -- whether it's bottled water or whatever -- supplies, sort of may be because they don't want people to rebuild in Ward 9, so that's sort of part one. What's the President's position about rebuilding Ward 9?

MR. McCLELLAN: Well, we just revisited that area not long ago, and they're working away on the levees and repairing those levees in that area. There are a number of volunteers -- in fact, we saw it on one of our most recent visits down there, there are a number of volunteers that are working in that area to help clear the debris and to help people rebuild their homes in that area.

In terms of the President's view, the President's view is that it needs to be a locally inspired vision for the city of New Orleans. And that's why he looks to those leaders to develop the plan, and then we are there to support them as they move forward on that plan.

Q And secondly on again, the same Gulf area, the insurance industry is not federally regulated, but there have been a lot of problems with the insurance agencies and the insurance companies. Has the President had any private conversations, or even group conversations with some of the insurance companies?

MR. McCLELLAN: He's had numerous conversations with leaders in the region, and with people in the region about those issues. If you're talking about flood insurance and whether it's wind or water damage that was caused, that's something this President has been talking about from the very beginning and visiting with officials about, and that leaders in the area have made a priority and been working to address, as well.

And also you look at the cash assistance we've provided, and the loans we've provided, and the way we've worked to speed that process up to help in those efforts, and the community development block grants that we've provided so that those leaders in those areas can help address some of these issues.

Connie, go ahead.

Q Just a personal question, just wondering how you're feeling today with this transition, what your plans are for the future? What do you want to do when you grow up?

MR. McCLELLAN: I don't think today is the day to get into all the reflecting. It's not the couch trip day yet. I'm still here for another week and a half, two weeks, and I think we can talk about that as I start walking out the door. Right now I just see the door. But I'm looking forward to it. My wife is looking forward to it, as well. In all our time together, it has only been in this position, so we're looking forward to starting that next chapter in our life together, and spending a little more time with her.